Global Aging
The rollback of pension promises is just one symptom of one of the greatest sociological shifts in history: The graying of the baby-boom generation. The ranks of 60-year-olds and older are growing 1.9% a year -- 60% faster than the overall world population. In 1950 there were 12 people aged 15 to 64 to support each one of retirement age. Now the global average is nine. It will be only four-to-one by mid-century, predicts the UN Population Div. By then the elderly will outnumber children for the first time. Some economists fear this will lead to bankrupt pensions and lower living standards.
That's why even more cutbacks in retirement benefits are likely. "I don't even want to think about my children's pensions," says Lina Iulita, 72, referring to Italy's hugely underfunded system. "There won't be enough money coming in." In Iulita's town of Dormeletto, on the shore of Lake Maggiore, coffee bars are jammed with seniors. The town's over-75 population has doubled since 1971, and there are one-third fewer children under 6. Local schools and gyms have closed, while senior citizens' clubs are flourishing.
Why the sudden attention to a demographic trend that has been obvious for decades? In part, it's because the future is already dawning in many nations. In South Korea and Japan, which have strong cultural aversions to immigration, small factories, construction companies, and health clinics are relying more on "temporary" workers from the Philippines, Bangladesh, and Vietnam. In reality they are becoming permanent second-class citizens. In China's northern industrial belt, state industries are struggling over how to lay off unneeded middle-age workers when there is no social safety net to support them.
That's why even more cutbacks in retirement benefits are likely. "I don't even want to think about my children's pensions," says Lina Iulita, 72, referring to Italy's hugely underfunded system. "There won't be enough money coming in." In Iulita's town of Dormeletto, on the shore of Lake Maggiore, coffee bars are jammed with seniors. The town's over-75 population has doubled since 1971, and there are one-third fewer children under 6. Local schools and gyms have closed, while senior citizens' clubs are flourishing.
Why the sudden attention to a demographic trend that has been obvious for decades? In part, it's because the future is already dawning in many nations. In South Korea and Japan, which have strong cultural aversions to immigration, small factories, construction companies, and health clinics are relying more on "temporary" workers from the Philippines, Bangladesh, and Vietnam. In reality they are becoming permanent second-class citizens. In China's northern industrial belt, state industries are struggling over how to lay off unneeded middle-age workers when there is no social safety net to support them.
Which brings me to the question- The graying of the Chinese after 2025. http://japanfocus.org/article.asp?id=215
Between 2000 and 2025 China’s median age is set to rise very substantially: from about 30 to around 39. According to unpd projections for 2025, in fact, China’s median age will be higher than America’s. The impending tempo of population aging in China is very nearly as rapid as anything history has yet seen. It will be far faster than what was recorded in the more developed regions over the past three decades and is exceeded only by Japan. There is a crucial difference, however, between Japan’s recent past and China’s prospective future. To put the matter bluntly, Japan became rich before it became old; China will do things the other way around. When Japan had the same proportion of population 65 and older as does China today (2000), its level of per capita output was three times higher than China’s is now. In 2025, 13.4 percent of China’s population is projected to be 65-plus; when Japan crossed the 13.4 percent threshold, its per capita gdp was approaching $20,000 a year (constant 1990 ppp dollars). One need not be a “Sino-pessimist” to suggest that China will be nowhere near that same economic marker 22 years from now.
Although China’s population will hardly be as elderly as Japan’s by 2025, its impending aging process promises to generate problems of a sort that Japan does not have to face. The first relates to its national pension system: Japan’s may be financially vulnerable, but China’s is nonexistent. Government or enterprise-based retirement programs cover only about one-sixth of the contemporary Chinese work force — and nearly all of the pieces in this haphazard patchwork are amazingly unsound in actuarial terms.10 Although Chinese leadership has been committed since 1997 to establishing a sturdy and universal social security system, actions to date have lagged far behind words and the system remains only in the planning stage.
For most aging Chinese today, the pension system is the family, and even with continuing national economic progress, Chinese families are likely to be placed under mounting pressure by the swelling ranks of seniors. By 2025, there will be nearly 300 million members of China’s 60-plus population, but, at the same time, the cohorts rising into that pool will be the same people who accounted for China’s sub-replacement fertility patterns in the early 1990s and thereafter. Absent a functioning nationwide pension program, unforgiving arithmetic suggests there may be something approaching a one-to-one ratio emerging between elderly parents and the children obliged to support them. Even worse, from the perspective of a Confucian culture, a sizable fraction — perhaps nearly one-fourth — of these older Chinese will have no living son on whom to rely for sustenance. One need not be a novelist to imagine the intense social tensions such conditions could engender (to say nothing of the personal and humanitarian tragedies).
Second, and no less important, there is no particular reason to expect that older people in China will be able to make the same sort of contributions to economic life as their counterparts in Japan. In low-income economies, the daily demands of ordinary work are more arduous than in rich countries: The employment structure is weighted toward categories more likely to require intense manual labor, and even ostensibly non-manual positions may require considerable physical stamina. According to official Chinese statistics, nearly half of the country’s current labor force toils in the fields, and another fifth is employed in mining and quarrying, manufacturing, construction, or transport — occupations generally not favoring the frail. Even with continuing structural transformations, regular work in 2025 is sure to be much more strenuous in China than in Japan. Moreover, China’s older population may not be as hardy as peers from affluent societies — people likely to have been better fed, housed, and doctored than China’s elderly throughout the course of their lives.
Data on the health status of older people in China and other countries tend to be spotty and problematic, and comparability of method can never be taken for granted. However, some of the survey data that are available through Réseau sur l’Espérance de Vie en Santé (reves), the international network of “health expectancy” researchers, are thought-provoking. According to a 1989–90 “health expectancy” study for Sichuan province, a person 60 years of age would spend less than half (48 percent) of his or her remaining years in passable health. By contrast, a study in West Germany for 1986 calculated that a 60-year-old woman could expect to spend 70 percent of her remaining time in “good health.” For men the fraction was 75 percent.11 Although one probably should not push those findings too far, they are certainly consistent with the proposition that China’s seniors are more brittle than older populations from more comfortable and prosperous locales.
Thus, China’s rapidly graying population appears to face a triple bind. Without a broad-coverage national pension system, and with only limited filial resources to fall back on, paid work will of necessity loom large as an option for economic security for many older Chinese. But employment in China, today and tomorrow, will be more physically punishing than in oecd countries, and China’s older cohorts are simply less likely to be up to the task. The aggregation of hundreds of millions of individual experiences with this triple bind over the coming generation will be a set of economic, social, and political constraints on Chinese development — and power augmentation — that have not as yet been fully appreciated in Beijing, much less overseas.
Although China’s population will hardly be as elderly as Japan’s by 2025, its impending aging process promises to generate problems of a sort that Japan does not have to face. The first relates to its national pension system: Japan’s may be financially vulnerable, but China’s is nonexistent. Government or enterprise-based retirement programs cover only about one-sixth of the contemporary Chinese work force — and nearly all of the pieces in this haphazard patchwork are amazingly unsound in actuarial terms.10 Although Chinese leadership has been committed since 1997 to establishing a sturdy and universal social security system, actions to date have lagged far behind words and the system remains only in the planning stage.
For most aging Chinese today, the pension system is the family, and even with continuing national economic progress, Chinese families are likely to be placed under mounting pressure by the swelling ranks of seniors. By 2025, there will be nearly 300 million members of China’s 60-plus population, but, at the same time, the cohorts rising into that pool will be the same people who accounted for China’s sub-replacement fertility patterns in the early 1990s and thereafter. Absent a functioning nationwide pension program, unforgiving arithmetic suggests there may be something approaching a one-to-one ratio emerging between elderly parents and the children obliged to support them. Even worse, from the perspective of a Confucian culture, a sizable fraction — perhaps nearly one-fourth — of these older Chinese will have no living son on whom to rely for sustenance. One need not be a novelist to imagine the intense social tensions such conditions could engender (to say nothing of the personal and humanitarian tragedies).
Second, and no less important, there is no particular reason to expect that older people in China will be able to make the same sort of contributions to economic life as their counterparts in Japan. In low-income economies, the daily demands of ordinary work are more arduous than in rich countries: The employment structure is weighted toward categories more likely to require intense manual labor, and even ostensibly non-manual positions may require considerable physical stamina. According to official Chinese statistics, nearly half of the country’s current labor force toils in the fields, and another fifth is employed in mining and quarrying, manufacturing, construction, or transport — occupations generally not favoring the frail. Even with continuing structural transformations, regular work in 2025 is sure to be much more strenuous in China than in Japan. Moreover, China’s older population may not be as hardy as peers from affluent societies — people likely to have been better fed, housed, and doctored than China’s elderly throughout the course of their lives.
Data on the health status of older people in China and other countries tend to be spotty and problematic, and comparability of method can never be taken for granted. However, some of the survey data that are available through Réseau sur l’Espérance de Vie en Santé (reves), the international network of “health expectancy” researchers, are thought-provoking. According to a 1989–90 “health expectancy” study for Sichuan province, a person 60 years of age would spend less than half (48 percent) of his or her remaining years in passable health. By contrast, a study in West Germany for 1986 calculated that a 60-year-old woman could expect to spend 70 percent of her remaining time in “good health.” For men the fraction was 75 percent.11 Although one probably should not push those findings too far, they are certainly consistent with the proposition that China’s seniors are more brittle than older populations from more comfortable and prosperous locales.
Thus, China’s rapidly graying population appears to face a triple bind. Without a broad-coverage national pension system, and with only limited filial resources to fall back on, paid work will of necessity loom large as an option for economic security for many older Chinese. But employment in China, today and tomorrow, will be more physically punishing than in oecd countries, and China’s older cohorts are simply less likely to be up to the task. The aggregation of hundreds of millions of individual experiences with this triple bind over the coming generation will be a set of economic, social, and political constraints on Chinese development — and power augmentation — that have not as yet been fully appreciated in Beijing, much less overseas.
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